Japan: Recycling and Sharing, Supported by SDGs, Are the Keys to Reducing Battery Costs

In 2020, Toyota launched the new Lexus UX300e, C-HR / Izoa EV (sister models) and C+pods, Honda released the Honda e, and Mazda introduced the MX-30 in Japan and overseas, indicating that Japanese automakers are stepping up efforts to increase their presence in the global BEV market. From 2021, Nissan and Mitsubishi, which are ahead in BEV business, plan to launch new models. Suzuki and Subaru also have plans to release BEVs. This trend indicates that many Japanese automakers position BEVs as important products in their environmental vehicle strategy. The largest problem regarding the development of mass-made BEVs has been the cost of drive batteries (LiB is the mainstream at present). Battery cost as a percentage of total vehicle price has declined from over half around 2015 to around one third in 2020, and some predict that it will drop to around one quarter in 5 years. However, there are many uncertainties in the development aimed at reducing battery costs, not only regarding front-line approaches such as technological innovation and creation of economies of scale, but also regarding efforts to reduce costs from multiple other perspectives.

At the “Smart Energy Week,” sponsored by Reed Exhibitions Japan, held in March 2021, a number of companies exhibited elemental technologies that contribute to improving battery performance. Several companies have also introduced their efforts regarding the recovery of costs that have been in the red at the new car sales stage through reuse and recycling. Specifically, batteries primarily used for mobility are planed to be reused for mobility if SOH (State of Health) is above a certain level, and if SOH is below a certain level, they will be reused as household stationary batteries. Major companies that develop electric vehicles, such as Toyota, Honda, and Nissan, are working on a framework of disassembling and recycling batteries that have reached the limit of warranty. It seems that measuring SOH of batteries for secondary or tertiary use can be made relatively inexpensive (according to FOURIN interviews). However, the process of recycling them and reusing them as new batteries takes a great deal of cost. The recovery and transportation of batteries, the safe removal of electrolytes, detoxification of exhaust gas generated during heat treatment, and the recovery of useful metals by refining can be more costly than the production of new batteries. It is therefore necessary to maximize efficiency in each step through cooperation with existing carriers and disposal companies. Although it is necessary to meet the requirements of various laws and regulations, the general opinion is that it is more cost-effective to dispose of LiBs than to recycle them. However, in recent years, companies have been making full-scale efforts to tackle SDGs, and even if it is costly to some extent, there is a growing tendency to emphasize environmental management, and it is expected that companies will step up efforts to recycle batteries in the 2020s.

As another direction regarding the cost reduction of batteries, some companies such as Honda have proposed the introduction of batteries which can be used for various purposes. Although BEV users range from light users to heavy users, Japanese automakers have only developed batteries that meet the demand of heavy users. Therefore, from the perspective of light users, they have been paying for batteries with excessive specifications. By sharing batteries, the large difference between the usage load of heavy users and light users can be leveled. It is expected that development can be carried out on the premise that the conditions of the battery usage environment will be relaxed compared to the past, leading to cost reduction. From the user’s point of view, if battery sharing is realized, for example, it will be possible to eliminate the waste of purchasing batteries for motorcycles that are rarely used in winter and batteries for snowplows that are not used in summer. Because the sharing economy also contributes to SDGs, the concept of sharing batteries may expand in the future.